diff --git a/apps/api/v2/src/ee/bookings/2024-08-13/controllers/e2e/seated-bookings.e2e-spec.ts b/apps/api/v2/src/ee/bookings/2024-08-13/controllers/e2e/seated-bookings.e2e-spec.ts
index 6591c027b9..ac1be9af05 100644
--- a/apps/api/v2/src/ee/bookings/2024-08-13/controllers/e2e/seated-bookings.e2e-spec.ts
+++ b/apps/api/v2/src/ee/bookings/2024-08-13/controllers/e2e/seated-bookings.e2e-spec.ts
@@ -1053,7 +1053,7 @@ describe("Bookings Endpoints 2024-08-13", () => {
             .set("Authorization", `Bearer ${apiKeyString}`)
             .expect(400);
 
-          expect(response.body.message).toEqual("Cancellation reason is required when you are the host");
+          expect(response.body.message).toEqual("Cancellation reason is required");
         });
 
         it("should cancel seated booking", async () => {
diff --git a/apps/web/components/booking/CancelBooking.tsx b/apps/web/components/booking/CancelBooking.tsx
index 68382ae43d..7c6662d817 100644
--- a/apps/web/components/booking/CancelBooking.tsx
+++ b/apps/web/components/booking/CancelBooking.tsx
@@ -1,17 +1,18 @@
 "use client";
 
-import { useCallback, useState } from "react";
-
 import { sdkActionManager } from "@calcom/embed-core/embed-iframe";
+import { isCancellationReasonRequired } from "@calcom/features/bookings/lib/cancellationReason";
 import { shouldChargeNoShowCancellationFee } from "@calcom/features/bookings/lib/payment/shouldChargeNoShowCancellationFee";
 import { useLocale } from "@calcom/lib/hooks/useLocale";
 import { useRefreshData } from "@calcom/lib/hooks/useRefreshData";
+import type { CancellationReasonRequirement } from "@calcom/prisma/enums";
 import type { RecurringEvent } from "@calcom/types/Calendar";
 import classNames from "@calcom/ui/classNames";
 import { Button } from "@calcom/ui/components/button";
-import { Label, Select, TextArea, CheckboxField } from "@calcom/ui/components/form";
+import { CheckboxField, Label, Select, TextArea } from "@calcom/ui/components/form";
 import { showToast } from "@calcom/ui/components/toast";
 import { InfoIcon, XIcon } from "@coss/ui/icons";
+import { useCallback, useState } from "react";
 
 interface InternalNotePresetsSelectProps {
   internalNotePresets: { id: number; name: string }[];
@@ -110,6 +111,7 @@ type Props = {
   internalNotePresets: { id: number; name: string; cancellationReason: string | null }[];
   renderContext: "booking-single-view" | "dialog";
   eventTypeMetadata?: Record<string, unknown> | null;
+  requiresCancellationReason?: CancellationReasonRequirement | null;
   showErrorAsToast?: boolean;
   onCanceled?: () => void;
 };
@@ -163,11 +165,18 @@ export default function CancelBooking(props: Props) {
   const isCancellationUserHost =
     props.isHost || bookingCancelledEventProps.organizer.email === currentUserEmail;
 
-  const hostMissingCancellationReason =
-    isCancellationUserHost &&
-    (!cancellationReason?.trim() || (props.internalNotePresets.length > 0 && !internalNote?.id));
+  const isReasonRequired = isCancellationReasonRequired(
+    props.requiresCancellationReason,
+    isCancellationUserHost
+  );
+
+  const missingRequiredReason = isReasonRequired && !cancellationReason?.trim();
+  const hostMissingInternalNote =
+    isCancellationUserHost && props.internalNotePresets.length > 0 && !internalNote?.id;
   const cancellationNoShowFeeNotAcknowledged =
     !props.isHost && cancellationNoShowFeeWarning && !acknowledgeCancellationNoShowFee;
+  const canCancel =
+    !missingRequiredReason && !hostMissingInternalNote && !cancellationNoShowFeeNotAcknowledged;
   const cancelBookingRef = useCallback((node: HTMLTextAreaElement) => {
     if (node !== null) {
       // eslint-disable-next-line @calcom/eslint/no-scroll-into-view-embed -- CancelBooking is not usually used in embed mode
@@ -275,7 +284,7 @@ export default function CancelBooking(props: Props) {
             </>
           )}
 
-          <Label>{isCancellationUserHost ? t("cancellation_reason_host") : t("cancellation_reason")}</Label>
+          <Label>{t(isReasonRequired ? "cancellation_reason" : "cancellation_reason_optional_label")}</Label>
 
           <TextArea
             data-testid="cancel_reason"
@@ -325,7 +334,7 @@ export default function CancelBooking(props: Props) {
               </Button>
               <Button
                 data-testid="confirm_cancel"
-                disabled={hostMissingCancellationReason || cancellationNoShowFeeNotAcknowledged}
+                disabled={!canCancel}
                 onClick={handleCancel}
                 loading={loading}>
                 {props.allRemainingBookings ? t("cancel_all_remaining") : t("cancel_event")}
diff --git a/apps/web/components/dialog/CancelBookingDialog.tsx b/apps/web/components/dialog/CancelBookingDialog.tsx
index 6419b45ccf..f1ea9e887b 100644
--- a/apps/web/components/dialog/CancelBookingDialog.tsx
+++ b/apps/web/components/dialog/CancelBookingDialog.tsx
@@ -2,6 +2,7 @@ import type { Dispatch, SetStateAction } from "react";
 
 import { Dialog } from "@calcom/features/components/controlled-dialog";
 import { useLocale } from "@calcom/lib/hooks/useLocale";
+import type { CancellationReasonRequirement } from "@calcom/prisma/enums";
 import { trpc } from "@calcom/trpc/react";
 import type { RecurringEvent } from "@calcom/types/Calendar";
 import { DialogContent, DialogHeader } from "@calcom/ui/components/dialog";
@@ -48,6 +49,7 @@ interface ICancelBookingDialog {
   isHost: boolean;
   internalNotePresets?: { id: number; name: string; cancellationReason: string | null }[];
   eventTypeMetadata?: Record<string, unknown> | null;
+  requiresCancellationReason?: CancellationReasonRequirement | null;
 }
 
 export const CancelBookingDialog = (props: ICancelBookingDialog) => {
@@ -67,6 +69,7 @@ export const CancelBookingDialog = (props: ICancelBookingDialog) => {
     isHost,
     internalNotePresets = [],
     eventTypeMetadata,
+    requiresCancellationReason,
   } = props;
 
   const utils = trpc.useUtils();
@@ -113,6 +116,7 @@ export const CancelBookingDialog = (props: ICancelBookingDialog) => {
           isHost={isHost}
           internalNotePresets={internalNotePresets}
           eventTypeMetadata={eventTypeMetadata}
+          requiresCancellationReason={requiresCancellationReason}
           showErrorAsToast={true}
           onCanceled={handleCanceled}
         />
diff --git a/apps/web/lib/booking.ts b/apps/web/lib/booking.ts
index 87e96d0e56..196b1d48e7 100644
--- a/apps/web/lib/booking.ts
+++ b/apps/web/lib/booking.ts
@@ -44,6 +44,7 @@ export const getEventTypesFromDB = async (id: number) => {
       hideOrganizerEmail: true,
       disableCancelling: true,
       disableRescheduling: true,
+      requiresCancellationReason: true,
       minimumRescheduleNotice: true,
       disableGuests: true,
       timeZone: true,
diff --git a/apps/web/modules/bookings/views/bookings-single-view.tsx b/apps/web/modules/bookings/views/bookings-single-view.tsx
index 0effd86916..985dff63d3 100644
--- a/apps/web/modules/bookings/views/bookings-single-view.tsx
+++ b/apps/web/modules/bookings/views/bookings-single-view.tsx
@@ -938,6 +938,7 @@ export default function Success(props: PageProps) {
                               payment: props.paymentStatus,
                             }}
                             eventTypeMetadata={eventType.metadata}
+                            requiresCancellationReason={eventType.requiresCancellationReason}
                             profile={{ name: props.profile.name, slug: props.profile.slug }}
                             recurringEvent={eventType.recurringEvent}
                             team={eventType?.team?.name}
diff --git a/apps/web/modules/event-types/components/tabs/advanced/EventAdvancedTab.tsx b/apps/web/modules/event-types/components/tabs/advanced/EventAdvancedTab.tsx
index 2e7e6da820..7b7f2b52d2 100644
--- a/apps/web/modules/event-types/components/tabs/advanced/EventAdvancedTab.tsx
+++ b/apps/web/modules/event-types/components/tabs/advanced/EventAdvancedTab.tsx
@@ -1,16 +1,6 @@
-import { useState, Suspense, useMemo, useEffect } from "react";
-import type { Dispatch, SetStateAction } from "react";
-import { Controller, useFormContext } from "react-hook-form";
-import type { z } from "zod";
-
 import { getPaymentAppData } from "@calcom/app-store/_utils/payments/getPaymentAppData";
 import { useAtomsContext } from "@calcom/atoms/hooks/useAtomsContext";
 import { useIsPlatform } from "@calcom/atoms/hooks/useIsPlatform";
-import {
-  SelectedCalendarsSettingsWebWrapper,
-  SelectedCalendarSettingsScope,
-  SelectedCalendarsSettingsWebWrapperSkeleton,
-} from "@calcom/web/modules/calendars/components/SelectedCalendarsSettingsWebWrapper";
 import { Timezone as PlatformTimzoneSelect } from "@calcom/atoms/timezone";
 import getLocationsOptionsForSelect from "@calcom/features/bookings/lib/getLocationOptionsForSelect";
 import DestinationCalendarSelector from "@calcom/features/calendars/components/DestinationCalendarSelector";
@@ -20,24 +10,20 @@ import {
   allowDisablingAttendeeConfirmationEmails,
   allowDisablingHostConfirmationEmails,
 } from "@calcom/features/ee/workflows/lib/allowDisablingStandardEmails";
-import { MultiplePrivateLinksController } from "@calcom/web/modules/event-types/components";
-import AddVerifiedEmail from "@calcom/web/modules/event-types/components/AddVerifiedEmail";
-import { LearnMoreLink } from "@calcom/features/eventtypes/components/LearnMoreLink";
 import type { EventNameObjectType } from "@calcom/features/eventtypes/lib/eventNaming";
 import { getEventName } from "@calcom/features/eventtypes/lib/eventNaming";
 import type {
-  FormValues,
-  EventTypeSetupProps,
-  SelectClassNames,
   CheckboxClassNames,
+  EventTypeSetupProps,
+  FormValues,
   InputClassNames,
+  SelectClassNames,
   SettingsToggleClassNames,
 } from "@calcom/features/eventtypes/lib/types";
-import { FormBuilder } from "./FormBuilder";
 import { BookerLayoutSelector } from "@calcom/web/modules/settings/components/BookerLayoutSelector";
 import {
-  DEFAULT_LIGHT_BRAND_COLOR,
   DEFAULT_DARK_BRAND_COLOR,
+  DEFAULT_LIGHT_BRAND_COLOR,
   MAX_SEATS_PER_TIME_SLOT,
 } from "@calcom/lib/constants";
 import { generateHashedLink } from "@calcom/lib/generateHashedLink";
@@ -45,25 +31,36 @@ import { checkWCAGContrastColor } from "@calcom/lib/getBrandColours";
 import { extractHostTimezone } from "@calcom/lib/hashedLinksUtils";
 import { useLocale } from "@calcom/lib/hooks/useLocale";
 import type { Prisma } from "@calcom/prisma/client";
-import { SchedulingType } from "@calcom/prisma/enums";
-import type { EditableSchema } from "@calcom/prisma/zod-utils";
-import type { fieldSchema } from "@calcom/prisma/zod-utils";
+import { CancellationReasonRequirement, SchedulingType } from "@calcom/prisma/enums";
+import type { EditableSchema, fieldSchema } from "@calcom/prisma/zod-utils";
 import type { RouterOutputs } from "@calcom/trpc/react";
 import classNames from "@calcom/ui/classNames";
 import { Alert } from "@calcom/ui/components/alert";
 import { Badge } from "@calcom/ui/components/badge";
 import { Button } from "@calcom/ui/components/button";
 import {
-  SelectField,
-  ColorPicker,
-  TextField,
-  Label,
   CheckboxField,
-  Switch,
-  SettingsToggle,
+  ColorPicker,
+  Label,
   Select,
+  SelectField,
+  SettingsToggle,
+  Switch,
+  TextField,
 } from "@calcom/ui/components/form";
 import { InfoIcon, PencilIcon } from "@coss/ui/icons";
+import {
+  SelectedCalendarSettingsScope,
+  SelectedCalendarsSettingsWebWrapper,
+  SelectedCalendarsSettingsWebWrapperSkeleton,
+} from "@calcom/web/modules/calendars/components/SelectedCalendarsSettingsWebWrapper";
+import { MultiplePrivateLinksController } from "@calcom/web/modules/event-types/components";
+import AddVerifiedEmail from "@calcom/web/modules/event-types/components/AddVerifiedEmail";
+import { LearnMoreLink } from "@calcom/features/eventtypes/components/LearnMoreLink";
+import type { Dispatch, SetStateAction } from "react";
+import { Suspense, useEffect, useMemo, useState } from "react";
+import { Controller, useFormContext } from "react-hook-form";
+import type { z } from "zod";
 
 import type { CustomEventTypeModalClassNames } from "./CustomEventTypeModal";
 import CustomEventTypeModal from "./CustomEventTypeModal";
@@ -71,6 +68,7 @@ import type { EmailNotificationToggleCustomClassNames } from "./DisableAllEmails
 import { DisableAllEmailsSetting } from "./DisableAllEmailsSetting";
 import type { DisableReschedulingCustomClassNames } from "./DisableReschedulingController";
 import DisableReschedulingController from "./DisableReschedulingController";
+import { FormBuilder } from "./FormBuilder";
 import type { RequiresConfirmationCustomClassNames } from "./RequiresConfirmationController";
 import RequiresConfirmationController from "./RequiresConfirmationController";
 
@@ -676,6 +674,43 @@ export const EventAdvancedTab = ({
           />
         </div>
       </div>
+      {!isPlatform && (
+        <Controller
+          name="requiresCancellationReason"
+          render={({ field: { value, onChange } }) => {
+            const cancellationReasonOptions = [
+              { value: CancellationReasonRequirement.MANDATORY_BOTH, label: t("mandatory_for_both") },
+              {
+                value: CancellationReasonRequirement.MANDATORY_HOST_ONLY,
+                label: t("mandatory_for_host_only"),
+              },
+              {
+                value: CancellationReasonRequirement.MANDATORY_ATTENDEE_ONLY,
+                label: t("mandatory_for_attendee_only"),
+              },
+              { value: CancellationReasonRequirement.OPTIONAL_BOTH, label: t("optional_for_both") },
+            ];
+            return (
+              <div className="border-subtle rounded-lg border px-4 py-6 sm:px-6">
+                <div className="flex items-center justify-between">
+                  <div>
+                    <p className="text-default text-sm font-semibold">{t("require_cancellation_reason")}</p>
+                    <p className="text-default text-sm">{t("require_cancellation_reason_description")}</p>
+                  </div>
+                  <Select
+                    value={cancellationReasonOptions.find(
+                      (opt) => opt.value === (value || CancellationReasonRequirement.MANDATORY_HOST_ONLY)
+                    )}
+                    options={cancellationReasonOptions}
+                    onChange={(selected) => onChange(selected?.value)}
+                    className="w-52"
+                  />
+                </div>
+              </div>
+            );
+          }}
+        />
+      )}
       <RequiresConfirmationController
         eventType={eventType}
         seatsEnabled={seatsEnabled}
diff --git a/packages/features/bookings/lib/cancellationReason.ts b/packages/features/bookings/lib/cancellationReason.ts
new file mode 100644
index 0000000000..d9e763c372
--- /dev/null
+++ b/packages/features/bookings/lib/cancellationReason.ts
@@ -0,0 +1,21 @@
+import { CancellationReasonRequirement } from "@calcom/prisma/enums";
+
+export function isCancellationReasonRequired(
+  setting: CancellationReasonRequirement | null | undefined,
+  isHost: boolean
+): boolean {
+  const requirement = setting ?? CancellationReasonRequirement.MANDATORY_HOST_ONLY;
+
+  switch (requirement) {
+    case CancellationReasonRequirement.OPTIONAL_BOTH:
+      return false;
+    case CancellationReasonRequirement.MANDATORY_BOTH:
+      return true;
+    case CancellationReasonRequirement.MANDATORY_HOST_ONLY:
+      return isHost;
+    case CancellationReasonRequirement.MANDATORY_ATTENDEE_ONLY:
+      return !isHost;
+    default:
+      return false;
+  }
+}
diff --git a/packages/features/bookings/lib/getBookingToDelete.ts b/packages/features/bookings/lib/getBookingToDelete.ts
index f69a4042af..c1f4189097 100644
--- a/packages/features/bookings/lib/getBookingToDelete.ts
+++ b/packages/features/bookings/lib/getBookingToDelete.ts
@@ -82,6 +82,7 @@ export async function getBookingToDelete(id: number | undefined, uid: string | u
           length: true,
           seatsPerTimeSlot: true,
           disableCancelling: true,
+          requiresCancellationReason: true,
           bookingFields: true,
           seatsShowAttendees: true,
           metadata: true,
diff --git a/packages/features/bookings/lib/handleCancelBooking.ts b/packages/features/bookings/lib/handleCancelBooking.ts
index 9291e3244f..05bb8f3c3b 100644
--- a/packages/features/bookings/lib/handleCancelBooking.ts
+++ b/packages/features/bookings/lib/handleCancelBooking.ts
@@ -47,6 +47,8 @@ import { getTimeFormatStringFromUserTimeFormat } from "@calcom/lib/timeFormat";
 import prisma from "@calcom/prisma";
 import type { WebhookTriggerEvents, WorkflowMethods } from "@calcom/prisma/enums";
 import { BookingStatus } from "@calcom/prisma/enums";
+
+import { isCancellationReasonRequired } from "./cancellationReason";
 import type { EventTypeMetadata } from "@calcom/prisma/zod-utils";
 import { bookingCancelInput, bookingMetadataSchema } from "@calcom/prisma/zod-utils";
 import type { CalendarEvent } from "@calcom/types/Calendar";
@@ -208,15 +210,15 @@ async function handler(input: CancelBookingInput, dependencies?: Dependencies) {
   const isCancellationUserHost =
     bookingToDelete.userId === userId || bookingToDelete.user.email === cancelledBy;
 
-  if (
-    !platformClientId &&
-    !cancellationReason?.trim() &&
-    isCancellationUserHost &&
-    !skipCancellationReasonValidation
-  ) {
+  const isReasonRequired = isCancellationReasonRequired(
+    bookingToDelete.eventType?.requiresCancellationReason,
+    isCancellationUserHost
+  );
+
+  if (!platformClientId && !cancellationReason?.trim() && isReasonRequired && !skipCancellationReasonValidation) {
     throw new HttpError({
       statusCode: 400,
-      message: "Cancellation reason is required when you are the host",
+      message: "Cancellation reason is required",
     });
   }
 
diff --git a/packages/features/bookings/lib/handleCancelBooking/test/handleCancelBooking.test.ts b/packages/features/bookings/lib/handleCancelBooking/test/handleCancelBooking.test.ts
index 0da58f3485..16a34ae261 100644
--- a/packages/features/bookings/lib/handleCancelBooking/test/handleCancelBooking.test.ts
+++ b/packages/features/bookings/lib/handleCancelBooking/test/handleCancelBooking.test.ts
@@ -715,7 +715,7 @@ describe("Cancel Booking", () => {
         },
         actionSource: "WEBAPP",
       })
-    ).rejects.toThrow("Cancellation reason is required when you are the host");
+    ).rejects.toThrow("Cancellation reason is required");
   });
 
   test("Should not charge cancellation fee when organizer cancels booking", async () => {
@@ -1667,4 +1667,660 @@ describe("Cancel Booking", () => {
     expect(result.onlyRemovedAttendee).toBe(false);
     expect(result.bookingId).toBe(idOfBookingToBeCancelled);
   });
+
+  describe("Cancellation Reason Requirement", () => {
+    test("Should block host cancellation without reason when requiresCancellationReason is MANDATORY_BOTH", async () => {
+      const handleCancelBooking = (await import("@calcom/features/bookings/lib/handleCancelBooking")).default;
+
+      const booker = getBooker({
+        email: "booker@example.com",
+        name: "Booker",
+      });
+
+      const organizer = getOrganizer({
+        name: "Organizer",
+        email: "organizer@example.com",
+        id: 101,
+        schedules: [TestData.schedules.IstWorkHours],
+        credentials: [getGoogleCalendarCredential()],
+        selectedCalendars: [TestData.selectedCalendars.google],
+      });
+
+      const uidOfBookingToBeCancelled = "mandatory-both-host-test";
+      const idOfBookingToBeCancelled = 8001;
+      const { dateString: plus1DateString } = getDate({ dateIncrement: 1 });
+
+      await createBookingScenario(
+        getScenarioData({
+          eventTypes: [
+            {
+              id: 1,
+              slotInterval: 30,
+              length: 30,
+              requiresCancellationReason: "MANDATORY_BOTH",
+              users: [{ id: 101 }],
+            },
+          ],
+          bookings: [
+            {
+              id: idOfBookingToBeCancelled,
+              uid: uidOfBookingToBeCancelled,
+              eventTypeId: 1,
+              userId: 101,
+              responses: {
+                email: booker.email,
+                name: booker.name,
+                location: { optionValue: "", value: BookingLocations.CalVideo },
+              },
+              status: BookingStatus.ACCEPTED,
+              startTime: `${plus1DateString}T05:00:00.000Z`,
+              endTime: `${plus1DateString}T05:30:00.000Z`,
+            },
+          ],
+          organizer,
+          apps: [TestData.apps["daily-video"]],
+        })
+      );
+
+      await expect(
+        handleCancelBooking({
+          bookingData: {
+            id: idOfBookingToBeCancelled,
+            uid: uidOfBookingToBeCancelled,
+            cancelledBy: organizer.email,
+          },
+        })
+      ).rejects.toThrow("Cancellation reason is required");
+    });
+
+    test("Should block attendee cancellation without reason when requiresCancellationReason is MANDATORY_BOTH", async () => {
+      const handleCancelBooking = (await import("@calcom/features/bookings/lib/handleCancelBooking")).default;
+
+      const booker = getBooker({
+        email: "booker@example.com",
+        name: "Booker",
+      });
+
+      const organizer = getOrganizer({
+        name: "Organizer",
+        email: "organizer@example.com",
+        id: 101,
+        schedules: [TestData.schedules.IstWorkHours],
+        credentials: [getGoogleCalendarCredential()],
+        selectedCalendars: [TestData.selectedCalendars.google],
+      });
+
+      const uidOfBookingToBeCancelled = "mandatory-both-attendee-test";
+      const idOfBookingToBeCancelled = 8002;
+      const { dateString: plus1DateString } = getDate({ dateIncrement: 1 });
+
+      await createBookingScenario(
+        getScenarioData({
+          eventTypes: [
+            {
+              id: 1,
+              slotInterval: 30,
+              length: 30,
+              requiresCancellationReason: "MANDATORY_BOTH",
+              users: [{ id: 101 }],
+            },
+          ],
+          bookings: [
+            {
+              id: idOfBookingToBeCancelled,
+              uid: uidOfBookingToBeCancelled,
+              eventTypeId: 1,
+              userId: 101,
+              responses: {
+                email: booker.email,
+                name: booker.name,
+                location: { optionValue: "", value: BookingLocations.CalVideo },
+              },
+              status: BookingStatus.ACCEPTED,
+              startTime: `${plus1DateString}T05:00:00.000Z`,
+              endTime: `${plus1DateString}T05:30:00.000Z`,
+            },
+          ],
+          organizer,
+          apps: [TestData.apps["daily-video"]],
+        })
+      );
+
+      await expect(
+        handleCancelBooking({
+          bookingData: {
+            id: idOfBookingToBeCancelled,
+            uid: uidOfBookingToBeCancelled,
+            cancelledBy: booker.email,
+          },
+        })
+      ).rejects.toThrow("Cancellation reason is required");
+    });
+
+    test("Should block attendee cancellation without reason when requiresCancellationReason is MANDATORY_ATTENDEE_ONLY", async () => {
+      const handleCancelBooking = (await import("@calcom/features/bookings/lib/handleCancelBooking")).default;
+
+      const booker = getBooker({
+        email: "booker@example.com",
+        name: "Booker",
+      });
+
+      const organizer = getOrganizer({
+        name: "Organizer",
+        email: "organizer@example.com",
+        id: 101,
+        schedules: [TestData.schedules.IstWorkHours],
+        credentials: [getGoogleCalendarCredential()],
+        selectedCalendars: [TestData.selectedCalendars.google],
+      });
+
+      const uidOfBookingToBeCancelled = "mandatory-attendee-only-test";
+      const idOfBookingToBeCancelled = 8003;
+      const { dateString: plus1DateString } = getDate({ dateIncrement: 1 });
+
+      await createBookingScenario(
+        getScenarioData({
+          eventTypes: [
+            {
+              id: 1,
+              slotInterval: 30,
+              length: 30,
+              requiresCancellationReason: "MANDATORY_ATTENDEE_ONLY",
+              users: [{ id: 101 }],
+            },
+          ],
+          bookings: [
+            {
+              id: idOfBookingToBeCancelled,
+              uid: uidOfBookingToBeCancelled,
+              eventTypeId: 1,
+              userId: 101,
+              responses: {
+                email: booker.email,
+                name: booker.name,
+                location: { optionValue: "", value: BookingLocations.CalVideo },
+              },
+              status: BookingStatus.ACCEPTED,
+              startTime: `${plus1DateString}T05:00:00.000Z`,
+              endTime: `${plus1DateString}T05:30:00.000Z`,
+            },
+          ],
+          organizer,
+          apps: [TestData.apps["daily-video"]],
+        })
+      );
+
+      await expect(
+        handleCancelBooking({
+          bookingData: {
+            id: idOfBookingToBeCancelled,
+            uid: uidOfBookingToBeCancelled,
+            cancelledBy: booker.email,
+          },
+        })
+      ).rejects.toThrow("Cancellation reason is required");
+    });
+
+    test("Should allow host cancellation without reason when requiresCancellationReason is MANDATORY_ATTENDEE_ONLY", async () => {
+      const handleCancelBooking = (await import("@calcom/features/bookings/lib/handleCancelBooking")).default;
+
+      const booker = getBooker({
+        email: "booker@example.com",
+        name: "Booker",
+      });
+
+      const organizer = getOrganizer({
+        name: "Organizer",
+        email: "organizer@example.com",
+        id: 101,
+        schedules: [TestData.schedules.IstWorkHours],
+        credentials: [getGoogleCalendarCredential()],
+        selectedCalendars: [TestData.selectedCalendars.google],
+      });
+
+      const uidOfBookingToBeCancelled = "mandatory-attendee-host-allowed-test";
+      const idOfBookingToBeCancelled = 8004;
+      const { dateString: plus1DateString } = getDate({ dateIncrement: 1 });
+
+      await createBookingScenario(
+        getScenarioData({
+          eventTypes: [
+            {
+              id: 1,
+              slotInterval: 30,
+              length: 30,
+              requiresCancellationReason: "MANDATORY_ATTENDEE_ONLY",
+              users: [{ id: 101 }],
+            },
+          ],
+          bookings: [
+            {
+              id: idOfBookingToBeCancelled,
+              uid: uidOfBookingToBeCancelled,
+              eventTypeId: 1,
+              userId: 101,
+              attendees: [{ email: booker.email, timeZone: "Asia/Kolkata" }],
+              responses: {
+                email: booker.email,
+                name: booker.name,
+                location: { optionValue: "", value: BookingLocations.CalVideo },
+              },
+              status: BookingStatus.ACCEPTED,
+              startTime: `${plus1DateString}T05:00:00.000Z`,
+              endTime: `${plus1DateString}T05:30:00.000Z`,
+            },
+          ],
+          organizer,
+          apps: [TestData.apps["daily-video"]],
+        })
+      );
+
+      mockSuccessfulVideoMeetingCreation({
+        metadataLookupKey: "dailyvideo",
+        videoMeetingData: {
+          id: "MOCK_ID",
+          password: "MOCK_PASS",
+          url: `http://mock-dailyvideo.example.com/meeting-attendee-only`,
+        },
+      });
+
+      mockCalendarToHaveNoBusySlots("googlecalendar", {
+        create: {
+          id: "MOCKED_GOOGLE_CALENDAR_EVENT_ID_ATTENDEE_ONLY",
+        },
+      });
+
+      const result = await handleCancelBooking({
+        bookingData: {
+          id: idOfBookingToBeCancelled,
+          uid: uidOfBookingToBeCancelled,
+          cancelledBy: organizer.email,
+        },
+      });
+
+      expect(result.success).toBe(true);
+    });
+
+    test("Should allow host cancellation without reason when requiresCancellationReason is OPTIONAL_BOTH", async () => {
+      const handleCancelBooking = (await import("@calcom/features/bookings/lib/handleCancelBooking")).default;
+
+      const booker = getBooker({
+        email: "booker@example.com",
+        name: "Booker",
+      });
+
+      const organizer = getOrganizer({
+        name: "Organizer",
+        email: "organizer@example.com",
+        id: 101,
+        schedules: [TestData.schedules.IstWorkHours],
+        credentials: [getGoogleCalendarCredential()],
+        selectedCalendars: [TestData.selectedCalendars.google],
+      });
+
+      const uidOfBookingToBeCancelled = "optional-both-host-test";
+      const idOfBookingToBeCancelled = 8005;
+      const { dateString: plus1DateString } = getDate({ dateIncrement: 1 });
+
+      await createBookingScenario(
+        getScenarioData({
+          eventTypes: [
+            {
+              id: 1,
+              slotInterval: 30,
+              length: 30,
+              requiresCancellationReason: "OPTIONAL_BOTH",
+              users: [{ id: 101 }],
+            },
+          ],
+          bookings: [
+            {
+              id: idOfBookingToBeCancelled,
+              uid: uidOfBookingToBeCancelled,
+              eventTypeId: 1,
+              userId: 101,
+              attendees: [{ email: booker.email, timeZone: "Asia/Kolkata" }],
+              responses: {
+                email: booker.email,
+                name: booker.name,
+                location: { optionValue: "", value: BookingLocations.CalVideo },
+              },
+              status: BookingStatus.ACCEPTED,
+              startTime: `${plus1DateString}T05:00:00.000Z`,
+              endTime: `${plus1DateString}T05:30:00.000Z`,
+            },
+          ],
+          organizer,
+          apps: [TestData.apps["daily-video"]],
+        })
+      );
+
+      mockSuccessfulVideoMeetingCreation({
+        metadataLookupKey: "dailyvideo",
+        videoMeetingData: {
+          id: "MOCK_ID",
+          password: "MOCK_PASS",
+          url: `http://mock-dailyvideo.example.com/meeting-optional-host`,
+        },
+      });
+
+      mockCalendarToHaveNoBusySlots("googlecalendar", {
+        create: {
+          id: "MOCKED_GOOGLE_CALENDAR_EVENT_ID_OPTIONAL_HOST",
+        },
+      });
+
+      const result = await handleCancelBooking({
+        bookingData: {
+          id: idOfBookingToBeCancelled,
+          uid: uidOfBookingToBeCancelled,
+          cancelledBy: organizer.email,
+        },
+      });
+
+      expect(result.success).toBe(true);
+    });
+
+    test("Should allow attendee cancellation without reason when requiresCancellationReason is OPTIONAL_BOTH", async () => {
+      const handleCancelBooking = (await import("@calcom/features/bookings/lib/handleCancelBooking")).default;
+
+      const booker = getBooker({
+        email: "booker@example.com",
+        name: "Booker",
+      });
+
+      const organizer = getOrganizer({
+        name: "Organizer",
+        email: "organizer@example.com",
+        id: 101,
+        schedules: [TestData.schedules.IstWorkHours],
+        credentials: [getGoogleCalendarCredential()],
+        selectedCalendars: [TestData.selectedCalendars.google],
+      });
+
+      const uidOfBookingToBeCancelled = "optional-both-attendee-test";
+      const idOfBookingToBeCancelled = 8006;
+      const { dateString: plus1DateString } = getDate({ dateIncrement: 1 });
+
+      await createBookingScenario(
+        getScenarioData({
+          eventTypes: [
+            {
+              id: 1,
+              slotInterval: 30,
+              length: 30,
+              requiresCancellationReason: "OPTIONAL_BOTH",
+              users: [{ id: 101 }],
+            },
+          ],
+          bookings: [
+            {
+              id: idOfBookingToBeCancelled,
+              uid: uidOfBookingToBeCancelled,
+              eventTypeId: 1,
+              userId: 101,
+              attendees: [{ email: booker.email, timeZone: "Asia/Kolkata" }],
+              responses: {
+                email: booker.email,
+                name: booker.name,
+                location: { optionValue: "", value: BookingLocations.CalVideo },
+              },
+              status: BookingStatus.ACCEPTED,
+              startTime: `${plus1DateString}T05:00:00.000Z`,
+              endTime: `${plus1DateString}T05:30:00.000Z`,
+            },
+          ],
+          organizer,
+          apps: [TestData.apps["daily-video"]],
+        })
+      );
+
+      mockSuccessfulVideoMeetingCreation({
+        metadataLookupKey: "dailyvideo",
+        videoMeetingData: {
+          id: "MOCK_ID",
+          password: "MOCK_PASS",
+          url: `http://mock-dailyvideo.example.com/meeting-optional-attendee`,
+        },
+      });
+
+      mockCalendarToHaveNoBusySlots("googlecalendar", {
+        create: {
+          id: "MOCKED_GOOGLE_CALENDAR_EVENT_ID_OPTIONAL_ATTENDEE",
+        },
+      });
+
+      const result = await handleCancelBooking({
+        bookingData: {
+          id: idOfBookingToBeCancelled,
+          uid: uidOfBookingToBeCancelled,
+          cancelledBy: booker.email,
+        },
+      });
+
+      expect(result.success).toBe(true);
+    });
+
+    test("Should allow attendee cancellation without reason when requiresCancellationReason is MANDATORY_HOST_ONLY", async () => {
+      const handleCancelBooking = (await import("@calcom/features/bookings/lib/handleCancelBooking")).default;
+
+      const booker = getBooker({
+        email: "booker@example.com",
+        name: "Booker",
+      });
+
+      const organizer = getOrganizer({
+        name: "Organizer",
+        email: "organizer@example.com",
+        id: 101,
+        schedules: [TestData.schedules.IstWorkHours],
+        credentials: [getGoogleCalendarCredential()],
+        selectedCalendars: [TestData.selectedCalendars.google],
+      });
+
+      const uidOfBookingToBeCancelled = "mandatory-host-attendee-allowed-test";
+      const idOfBookingToBeCancelled = 8007;
+      const { dateString: plus1DateString } = getDate({ dateIncrement: 1 });
+
+      await createBookingScenario(
+        getScenarioData({
+          eventTypes: [
+            {
+              id: 1,
+              slotInterval: 30,
+              length: 30,
+              requiresCancellationReason: "MANDATORY_HOST_ONLY",
+              users: [{ id: 101 }],
+            },
+          ],
+          bookings: [
+            {
+              id: idOfBookingToBeCancelled,
+              uid: uidOfBookingToBeCancelled,
+              eventTypeId: 1,
+              userId: 101,
+              attendees: [{ email: booker.email, timeZone: "Asia/Kolkata" }],
+              responses: {
+                email: booker.email,
+                name: booker.name,
+                location: { optionValue: "", value: BookingLocations.CalVideo },
+              },
+              status: BookingStatus.ACCEPTED,
+              startTime: `${plus1DateString}T05:00:00.000Z`,
+              endTime: `${plus1DateString}T05:30:00.000Z`,
+            },
+          ],
+          organizer,
+          apps: [TestData.apps["daily-video"]],
+        })
+      );
+
+      mockSuccessfulVideoMeetingCreation({
+        metadataLookupKey: "dailyvideo",
+        videoMeetingData: {
+          id: "MOCK_ID",
+          password: "MOCK_PASS",
+          url: `http://mock-dailyvideo.example.com/meeting-host-only-attendee`,
+        },
+      });
+
+      mockCalendarToHaveNoBusySlots("googlecalendar", {
+        create: {
+          id: "MOCKED_GOOGLE_CALENDAR_EVENT_ID_HOST_ONLY_ATTENDEE",
+        },
+      });
+
+      const result = await handleCancelBooking({
+        bookingData: {
+          id: idOfBookingToBeCancelled,
+          uid: uidOfBookingToBeCancelled,
+          cancelledBy: booker.email,
+        },
+      });
+
+      expect(result.success).toBe(true);
+    });
+
+    test("Should block host cancellation without reason when requiresCancellationReason is null (default behavior)", async () => {
+      const handleCancelBooking = (await import("@calcom/features/bookings/lib/handleCancelBooking")).default;
+
+      const booker = getBooker({
+        email: "booker@example.com",
+        name: "Booker",
+      });
+
+      const organizer = getOrganizer({
+        name: "Organizer",
+        email: "organizer@example.com",
+        id: 101,
+        schedules: [TestData.schedules.IstWorkHours],
+        credentials: [getGoogleCalendarCredential()],
+        selectedCalendars: [TestData.selectedCalendars.google],
+      });
+
+      const uidOfBookingToBeCancelled = "null-default-host-test";
+      const idOfBookingToBeCancelled = 8008;
+      const { dateString: plus1DateString } = getDate({ dateIncrement: 1 });
+
+      await createBookingScenario(
+        getScenarioData({
+          eventTypes: [
+            {
+              id: 1,
+              slotInterval: 30,
+              length: 30,
+              users: [{ id: 101 }],
+            },
+          ],
+          bookings: [
+            {
+              id: idOfBookingToBeCancelled,
+              uid: uidOfBookingToBeCancelled,
+              eventTypeId: 1,
+              userId: 101,
+              responses: {
+                email: booker.email,
+                name: booker.name,
+                location: { optionValue: "", value: BookingLocations.CalVideo },
+              },
+              status: BookingStatus.ACCEPTED,
+              startTime: `${plus1DateString}T05:00:00.000Z`,
+              endTime: `${plus1DateString}T05:30:00.000Z`,
+            },
+          ],
+          organizer,
+          apps: [TestData.apps["daily-video"]],
+        })
+      );
+
+      await expect(
+        handleCancelBooking({
+          bookingData: {
+            id: idOfBookingToBeCancelled,
+            uid: uidOfBookingToBeCancelled,
+            cancelledBy: organizer.email,
+          },
+        })
+      ).rejects.toThrow("Cancellation reason is required");
+    });
+
+    test("Should allow attendee cancellation without reason when requiresCancellationReason is null (default behavior)", async () => {
+      const handleCancelBooking = (await import("@calcom/features/bookings/lib/handleCancelBooking")).default;
+
+      const booker = getBooker({
+        email: "booker@example.com",
+        name: "Booker",
+      });
+
+      const organizer = getOrganizer({
+        name: "Organizer",
+        email: "organizer@example.com",
+        id: 101,
+        schedules: [TestData.schedules.IstWorkHours],
+        credentials: [getGoogleCalendarCredential()],
+        selectedCalendars: [TestData.selectedCalendars.google],
+      });
+
+      const uidOfBookingToBeCancelled = "null-default-attendee-test";
+      const idOfBookingToBeCancelled = 8009;
+      const { dateString: plus1DateString } = getDate({ dateIncrement: 1 });
+
+      await createBookingScenario(
+        getScenarioData({
+          eventTypes: [
+            {
+              id: 1,
+              slotInterval: 30,
+              length: 30,
+              users: [{ id: 101 }],
+            },
+          ],
+          bookings: [
+            {
+              id: idOfBookingToBeCancelled,
+              uid: uidOfBookingToBeCancelled,
+              eventTypeId: 1,
+              userId: 101,
+              attendees: [{ email: booker.email, timeZone: "Asia/Kolkata" }],
+              responses: {
+                email: booker.email,
+                name: booker.name,
+                location: { optionValue: "", value: BookingLocations.CalVideo },
+              },
+              status: BookingStatus.ACCEPTED,
+              startTime: `${plus1DateString}T05:00:00.000Z`,
+              endTime: `${plus1DateString}T05:30:00.000Z`,
+            },
+          ],
+          organizer,
+          apps: [TestData.apps["daily-video"]],
+        })
+      );
+
+      mockSuccessfulVideoMeetingCreation({
+        metadataLookupKey: "dailyvideo",
+        videoMeetingData: {
+          id: "MOCK_ID",
+          password: "MOCK_PASS",
+          url: `http://mock-dailyvideo.example.com/meeting-null-default`,
+        },
+      });
+
+      mockCalendarToHaveNoBusySlots("googlecalendar", {
+        create: {
+          id: "MOCKED_GOOGLE_CALENDAR_EVENT_ID_NULL_DEFAULT",
+        },
+      });
+
+      const result = await handleCancelBooking({
+        bookingData: {
+          id: idOfBookingToBeCancelled,
+          uid: uidOfBookingToBeCancelled,
+          cancelledBy: booker.email,
+        },
+      });
+
+      expect(result.success).toBe(true);
+    });
+  });
 });
diff --git a/packages/features/eventtypes/lib/defaultEvents.ts b/packages/features/eventtypes/lib/defaultEvents.ts
index bf611fb787..08e8f6fbad 100644
--- a/packages/features/eventtypes/lib/defaultEvents.ts
+++ b/packages/features/eventtypes/lib/defaultEvents.ts
@@ -89,6 +89,7 @@ const commons = {
   seatsShowAvailabilityCount: null,
   disableCancelling: false,
   disableRescheduling: false,
+  requiresCancellationReason: null,
   minimumRescheduleNotice: null,
   onlyShowFirstAvailableSlot: false,
   allowReschedulingPastBookings: false,
diff --git a/packages/features/eventtypes/lib/types.ts b/packages/features/eventtypes/lib/types.ts
index 06695d54c5..4dd9c404c6 100644
--- a/packages/features/eventtypes/lib/types.ts
+++ b/packages/features/eventtypes/lib/types.ts
@@ -6,7 +6,7 @@ import type { ChildrenEventType } from "@calcom/features/eventtypes/lib/children
 import type { IntervalLimit } from "@calcom/lib/intervalLimits/intervalLimitSchema";
 import type { AttributesQueryValue } from "@calcom/lib/raqb/types";
 import type { EventTypeTranslation } from "@calcom/prisma/client";
-import type { MembershipRole, PeriodType, SchedulingType } from "@calcom/prisma/enums";
+import type { CancellationReasonRequirement, MembershipRole, PeriodType, SchedulingType } from "@calcom/prisma/enums";
 import type {
   BookerLayoutSettings,
   CustomInputSchema,
@@ -388,6 +388,7 @@ export type EventTypeUpdateInput = {
   showOptimizedSlots?: boolean | null;
   disableCancelling?: boolean | null;
   disableRescheduling?: boolean | null;
+  requiresCancellationReason?: CancellationReasonRequirement | null;
   minimumRescheduleNotice?: number | null;
   seatsShowAttendees?: boolean | null;
   seatsShowAvailabilityCount?: boolean | null;
diff --git a/packages/i18n/locales/en/common.json b/packages/i18n/locales/en/common.json
index c197f19579..9f8e388ba7 100644
--- a/packages/i18n/locales/en/common.json
+++ b/packages/i18n/locales/en/common.json
@@ -84,9 +84,9 @@
   "need_to_reschedule_or_cancel": "Need to reschedule or cancel?",
   "you_can_view_booking_details_with_this_url": "You can view the booking details from this url {{url}} and add the event to your calendar",
   "no_options_available": "No options available",
-  "cancellation_reason": "Reason for cancellation (optional)",
+  "cancellation_reason": "Reason for cancellation",
+  "cancellation_reason_optional_label": "Reason for cancellation (optional)",
   "cancelled_by": "Cancelled By",
-  "cancellation_reason_host": "Reason for cancellation",
   "cancellation_reason_placeholder": "Why are you cancelling?",
   "notify_attendee_cancellation_reason_warning": "Cancellation reason will be shared with guests",
   "rejection_reason_placeholder": "Why are you rejecting?",
@@ -1507,8 +1507,14 @@
   "rescheduling_is_disabled": "Rescheduling is disabled for this event",
   "allow_rescheduling_cancelled_bookings": "Allow booking through reschedule link",
   "description_allow_rescheduling_cancelled_bookings": "When enabled, users will be able to create a new booking when trying to reschedule a cancelled booking",
-  "disable_cancelling": "Disable cancelling",
-  "description_disable_cancelling": "Guests and organizer can no longer cancel the event with calendar invite or email. <0>Learn more</0>",
+  "disable_cancelling": "Disable Cancelling",
+  "description_disable_cancelling": "Guests and Organizer can no longer cancel the event with calendar invite or email. <0>Learn more</0>",
+  "require_cancellation_reason": "Require cancellation reason",
+  "require_cancellation_reason_description": "Ask for a reason when someone cancels a booking",
+  "mandatory_for_both": "Mandatory for both",
+  "mandatory_for_host_only": "Mandatory for host only",
+  "mandatory_for_attendee_only": "Mandatory for attendee only",
+  "optional_for_both": "Optional for both",
   "revoke_api_key": "Revoke API key",
   "api_key_copied": "API key copied!",
   "api_key_expires_on": "The API key will expire on",
diff --git a/packages/lib/test/builder.ts b/packages/lib/test/builder.ts
index 1f0f676bc4..233f002fa6 100644
--- a/packages/lib/test/builder.ts
+++ b/packages/lib/test/builder.ts
@@ -168,6 +168,7 @@ export const buildEventType = (eventType?: Partial<EventType>): EventType => {
     createdAt: null,
     updatedAt: null,
     rrHostSubsetEnabled: false,
+    requiresCancellationReason: null,
     enablePerHostLocations: false,
     ...eventType,
   };
diff --git a/packages/prisma/migrations/20260115111819_add_cancellation_reason_require/migration.sql b/packages/prisma/migrations/20260115111819_add_cancellation_reason_require/migration.sql
new file mode 100644
index 0000000000..5caebc6a86
--- /dev/null
+++ b/packages/prisma/migrations/20260115111819_add_cancellation_reason_require/migration.sql
@@ -0,0 +1,5 @@
+-- CreateEnum
+CREATE TYPE "public"."CancellationReasonRequirement" AS ENUM ('MANDATORY_BOTH', 'MANDATORY_HOST_ONLY', 'MANDATORY_ATTENDEE_ONLY', 'OPTIONAL_BOTH');
+
+-- AlterTable
+ALTER TABLE "public"."EventType" ADD COLUMN     "requiresCancellationReason" "public"."CancellationReasonRequirement" DEFAULT 'MANDATORY_HOST_ONLY';
diff --git a/packages/prisma/schema.prisma b/packages/prisma/schema.prisma
index 8ca80f786b..2816243106 100644
--- a/packages/prisma/schema.prisma
+++ b/packages/prisma/schema.prisma
@@ -146,6 +146,13 @@ model VideoCallGuest {
   @@index([email])
 }
 
+enum CancellationReasonRequirement {
+  MANDATORY_BOTH
+  MANDATORY_HOST_ONLY
+  MANDATORY_ATTENDEE_ONLY
+  OPTIONAL_BOTH
+}
+
 model EventType {
   id                Int     @id @default(autoincrement())
   /// @zod.string.min(1)
@@ -279,8 +286,9 @@ model EventType {
   restrictionSchedule   Schedule?   @relation("restrictionSchedule", fields: [restrictionScheduleId], references: [id])
   hostGroups            HostGroup[]
 
-  bookingRequiresAuthentication Boolean @default(false)
-  rrHostSubsetEnabled           Boolean @default(false)
+  bookingRequiresAuthentication Boolean                        @default(false)
+  rrHostSubsetEnabled           Boolean                        @default(false)
+  requiresCancellationReason    CancellationReasonRequirement? @default(MANDATORY_HOST_ONLY)
   enablePerHostLocations        Boolean @default(false)
 
   createdAt DateTime? @default(now())
diff --git a/packages/prisma/zod-utils.ts b/packages/prisma/zod-utils.ts
index 316f0905d6..1d5b23f8aa 100644
--- a/packages/prisma/zod-utils.ts
+++ b/packages/prisma/zod-utils.ts
@@ -771,6 +771,7 @@ export const allManagedEventTypeProps: { [k in keyof Omit<Prisma.EventTypeSelect
   disableGuests: true,
   disableCancelling: true,
   disableRescheduling: true,
+  requiresCancellationReason: true,
   allowReschedulingCancelledBookings: true,
   requiresConfirmation: true,
   canSendCalVideoTranscriptionEmails: true,
@@ -853,6 +854,7 @@ export const allManagedEventTypePropsForZod = {
   disableGuests: true,
   disableCancelling: true,
   disableRescheduling: true,
+  requiresCancellationReason: true,
   allowReschedulingCancelledBookings: true,
   requiresConfirmation: true,
   canSendCalVideoTranscriptionEmails: true,
diff --git a/packages/trpc/server/routers/viewer/eventTypes/types.ts b/packages/trpc/server/routers/viewer/eventTypes/types.ts
index 2d4e9cd7cb..e29fc9672b 100644
--- a/packages/trpc/server/routers/viewer/eventTypes/types.ts
+++ b/packages/trpc/server/routers/viewer/eventTypes/types.ts
@@ -165,6 +165,10 @@ const BaseEventTypeUpdateInput: z.ZodType<TUpdateInputSchema> = z
     showOptimizedSlots: z.boolean().nullable().optional(),
     disableCancelling: z.boolean().nullable().optional(),
     disableRescheduling: z.boolean().nullable().optional(),
+    requiresCancellationReason: z
+      .enum(["MANDATORY_BOTH", "MANDATORY_HOST_ONLY", "MANDATORY_ATTENDEE_ONLY", "OPTIONAL_BOTH"])
+      .nullable()
+      .optional(),
     minimumRescheduleNotice: z.number().min(0).nullable().optional(),
     seatsShowAttendees: z.boolean().nullable().optional(),
     seatsShowAvailabilityCount: z.boolean().nullable().optional(),
diff --git a/specs/cancellation-reason-requirement/CLAUDE.md b/specs/cancellation-reason-requirement/CLAUDE.md
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+# CLAUDE.md — Cancellation Reason Requirement
+
+## Project Context
+
+A setting in Event Type Advanced settings to configure when cancellation reasons are required (mandatory for both, host only, attendee only, or optional).
+
+## Before Starting Work
+
+1. Read specs/cancellation-reason-requirement/design.md
+2. Check specs/cancellation-reason-requirement/implementation.md for current progress
+3. Look at existing patterns in apps/web/modules/event-types/components/tabs/advanced/
+
+## Code Patterns
+
+- Follow RequiresConfirmationController pattern for settings UI
+- Use metadata schema in packages/prisma/zod-utils.ts
+- Follow existing translation patterns
+
+## Don't
+
+- Don't add features not in design.md
+- Don't skip tests
+- Don't modify reschedule reason behavior (out of scope)
diff --git a/specs/cancellation-reason-requirement/decisions.md b/specs/cancellation-reason-requirement/decisions.md
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+# Cancellation Reason Requirement Decisions
+
+## ADR-001: Store in Database Column vs Metadata JSON
+
+### Context
+
+Need to store the cancellation reason requirement setting on EventType.
+
+### Options Considered
+
+1. **New database column with enum** — Requires migration, type-safe, cleaner queries
+2. **Metadata JSON field** — No migration, but less type-safe for a core setting
+
+### Decision
+
+Use a dedicated database column with a Prisma enum (`CancellationReasonRequirement`).
+
+Rationale:
+- This is a core booking flow setting, similar to `disableCancelling` and `requiresConfirmation`
+- Type-safe at the database level
+- Cleaner to query in cancellation validation logic
+- Consistent with how similar settings (`disableCancelling`, `disableRescheduling`) are stored
+
+### Consequences
+
+- Requires database migration
+- Type-safe enum values
+- Direct column access in queries (no JSON parsing)
diff --git a/specs/cancellation-reason-requirement/design.md b/specs/cancellation-reason-requirement/design.md
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+# Cancellation Reason Requirement Design
+
+## Overview
+
+Add a dropdown setting in Event Type Advanced settings that allows hosts to configure when cancellation reasons are required from hosts and/or attendees.
+
+## Problem Statement
+
+Currently, cancellation reasons are always optional. Hosts need the ability to require reasons for better tracking and accountability.
+
+## User Stories
+
+- As a host, I want to require cancellation reasons from attendees so that I understand why bookings are cancelled
+- As a host, I want to require my team to provide cancellation reasons so that we have records of why bookings were cancelled
+- As a host, I want to make cancellation reasons optional when they're not needed
+
+## Technical Design
+
+### Database Changes
+
+Add new enum `CancellationReasonRequirement` with values:
+- `MANDATORY_BOTH`
+- `MANDATORY_HOST_ONLY`
+- `MANDATORY_ATTENDEE_ONLY`
+- `OPTIONAL_BOTH`
+
+Add column `requiresCancellationReason` to EventType model with default `MANDATORY_HOST_ONLY`.
+
+Location: `packages/prisma/schema.prisma` (near `disableCancelling`/`disableRescheduling`)
+
+### API Changes
+
+Update `packages/features/bookings/lib/handleCancelBooking.ts` to validate cancellation reason based on:
+- Event type's `requiresCancellationReason` setting
+- Who is cancelling (host vs attendee)
+
+### UI Changes
+
+**Event Type Settings**
+
+Location: `apps/web/modules/event-types/components/tabs/advanced/EventAdvancedTab.tsx`
+
+Add dropdown after Booking Questions section, before RequiresConfirmationController:
+- Label: "Require cancellation reason"
+- Description: "Ask for a reason when someone cancels a booking"
+- Options: Mandatory for both, Mandatory for host only (default), Mandatory for attendee only, Optional for both
+
+**Cancel Booking**
+
+Location: `apps/web/components/booking/CancelBooking.tsx`
+
+- Add `requiresCancellationReason` prop
+- Replace hardcoded `hostMissingCancellationReason` logic with configurable validation based on the setting
+- Show required indicator on textarea when reason is required
+
+## Data Flow
+
+1. EventType stores `requiresCancellationReason` in database
+2. `getEventTypesFromDB` (`apps/web/lib/booking.ts`) includes the field in select
+3. Value flows through page props to booking views
+4. `CancelBooking` component uses it for validation
+
+Files requiring prop threading:
+- `apps/web/lib/booking.ts`
+- `apps/web/modules/bookings/views/bookings-single-view.tsx`
+- `apps/web/components/dialog/CancelBookingDialog.tsx`
+
+## Edge Cases
+
+- Platform users: Should respect the setting
+- Team bookings: Setting applies regardless of team context
+- Null column value: Default to `MANDATORY_HOST_ONLY` behavior
+- Default event types (no eventTypeId): Use default `MANDATORY_HOST_ONLY`
+
+## Out of Scope
+
+- Reschedule reason configuration (separate feature)
+- Custom reason dropdown options
+- Reason analytics/reporting
diff --git a/specs/cancellation-reason-requirement/docs/README.md b/specs/cancellation-reason-requirement/docs/README.md
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+# Cancellation Reason Requirement Documentation
+
+## Overview
+
+This feature allows event type owners to configure when cancellation reasons are required.
+
+## Screenshots
+
+Screenshots will be added here once the feature is implemented.
+
+## Configuration
+
+The setting is located in Event Type → Advanced Settings, after the Booking Questions section.
+
+### Options
+
+- **Mandatory for both**: Both host and attendee must provide a reason when cancelling
+- **Mandatory for host only** (default): Only the host must provide a reason
+- **Mandatory for attendee only**: Only the attendee must provide a reason
+- **Optional for both**: Cancellation reason is optional for everyone
diff --git a/specs/cancellation-reason-requirement/future-work.md b/specs/cancellation-reason-requirement/future-work.md
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+# Cancellation Reason Requirement Future Work
+
+Ideas and enhancements deferred from initial implementation.
+
+## Enhancements
+
+- Reschedule reason requirement (same pattern, separate setting)
+- Custom predefined reason options (dropdown instead of free text)
+- Reason analytics dashboard
+
+## Technical Debt
+
+## Nice to Have
+
+- Per-user reason requirement overrides
+- Reason templates
diff --git a/specs/cancellation-reason-requirement/implementation.md b/specs/cancellation-reason-requirement/implementation.md
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+++ b/specs/cancellation-reason-requirement/implementation.md
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+# Cancellation Reason Requirement Implementation
+
+## Status: complete
+
+## Completed
+
+1. Added CancellationReasonRequirement enum to schema.prisma (line 129)
+2. Added requiresCancellationReason column to EventType model (line 269)
+3. Created database migration (20260115111819_add_cancellation_reason_require)
+4. Added translation keys to English locale (common.json)
+5. Added dropdown setting in EventAdvancedTab (lines 691-719)
+6. Added requiresCancellationReason to getEventTypesFromDB select (apps/web/lib/booking.ts)
+7. Passed requiresCancellationReason prop through:
+   - bookings-single-view.tsx → CancelBooking
+   - CancelBookingDialog.tsx → CancelBooking
+8. Updated CancelBooking component Props and validation logic
+9. Added server-side validation in handleCancelBooking
+10. Added requiresCancellationReason to getBookingToDelete select
+11. Fixed dynamic label to show "(optional)" only when isReasonRequiredForUser() returns false
+
+## In Progress
+
+## Blocked
+
+## Next Steps
+
+- Test the feature end-to-end
+- Verify all dropdown options work correctly
+- Verify dynamic label shows "(optional)" only when appropriate
+
+## Session Notes
+
+- Enum and column were already added to schema during planning phase
+- Migration was already created